Airtel yesterday announced acquiring Tikona s 4G business including the Broadband Wireless Access (BWA) spectrum and 350 sites, in five telecom circles. The move is supposed to help Airtel expand its 4G footprints in India as it gears up for a fierce battle with Reliance Jio, Idea-Vodafone combined. Rajesh Tiwari, one of the co-founders of Tikona, however could spoil Airtel s party as he has reportedly sent a legal notice against Airtel and Tikona for not sharing details about how the proceeds will be distributed among shareholders. Also Read - Airtel 5G service rollout: Airtel and Tata Group partner for Made in India 5G networkAlso Read - Jio maintains lead in 4G download speed, Vi in upload in May: TRAI
Rajesh Tiwari, who is also a minority stakeholder in Tikona with over 1 percent share, said that the two companies should not proceed with the deal until there is a clarity on entitlements , reports Economic Times. Rajesh Tiwari is associated with Tikona Digital Networks Pvt. Ltd since 2008. Meanwhile, Bharti Airtel has declined to comment on the issue. BGR India has also reached out to Tikona on the matter. Also Read - Airtel launches new Rs 456 prepaid plan: Check data, validity, call and other benefits
Airtel s acquisition of Tikona s 4G business comes shortly after Vodafone and Idea Cellular announced merging their business to create one entity. The joint venture will be bigger than Airtel, which currently holds top position in the market. Airtel has over 364 million customers across its operations at the end of December 2016 whereas Idea-Vodafone combined will have a customer base of over 394 million. Meanwhile, Reliance Jio is also racing ahead with more than 100 million subscribers in a very short period of time.
Since the majority of battle is in the 4G space, Airtel s latest acquisition will help expand its 4G footprints in India as well as close in on the capacity of Idea-Vodafone and Reliance Jio s. Airtel now has access to Tikona s 4G spectrum in as many as five circles, Gujarat, UP E, UP W, Himachal Pradesh, and Rajasthan.
It may be recalled that Airtel had secured 4G spectrum in just four out of 22 circles in 2010 auctions. Airtel, however, has been looking to compensate this with a spree of strategic acquisitions and deals. In a span of the last five years, the company has acquired spectrum from Qualcomm, Augere Wireless, Videocon Telecom, Aircel, and Telenor. ALSO READ: Reliance Jio vs Airtel: Competition has moved beyond business, into squabbling
The proposed acquisition (of Tikona s 4G business) will enable Airtel to fill BWA spectrum gaps in the 2300 MHz band in Rajasthan, UP (East) and UP (West), thereby securing a pan India footprint in the band. The deal will significantly bolster Airtel s spectrum position in Gujarat and Himachal Pradesh, taking its overall BWA spectrum holding to 30 MHz each in these circles. Post completion of the deal, Airtel will have 30 MHz in the 2300 MHz band in 13 circles giving it tremendous advantage to handle the surging data demand, said Airtel in a release.
The Airtel-Tikona deal also reflects on the ongoing consolidation phase in the telecom space. After the Vodafone-Idea deal, this is another step towards consolidation in the Indian telecom sector. Overall things are heading in the right direction for a healthy competition. The Indian telecom sector is under pressure and the future expansion and growth will depend on the quantum of spectrum held and the quality of services offered. Such acquisitions help operators to address the above highlighted issues, said Rishi Tejpal, Principal Research Analyst, Gartner.